Posts Authored by Jacqueline S. Mallett

Remember to update the Ohio Homebuyers’ Protection Act form for 2017

Residential Mortgage lenders should be mindful to not forget to update their Ohio Homebuyers’ Protection Act Informational Document with the 2017 prepayment penalty adjustment. Beginning January 1, 2017, no mortgage broker, loan officer or nonbank mortgage lender may charge a penalty for the prepayment or refinancing of a residential mortgage obligation secured by a first lien if the loan amount is less than $88,503. See Ohio Revised Code 1343.011(C)(2).

The Ohio Homebuyers’ Protection Act Informational Document is required by Ohio Revised Code 1345.05(G). An acknowledgement of the consumer’s receipt must be retained by the lender, mortgage broker and loan officer, as applicable. The Ohio Attorney General and the Department of Commerce may examine your records to ensure that you are providing the most current version of this document to consumers with the 2017 adjusted amount. The updated form can be found here. The rule regarding distribution and receipt of the Informational Document can be found here.

Also, don’t forget that Nationwide Multistate Licensing System & Registry (NMLS) renewal season started November 1.  If you have any NMLS or state-licensing questions or issues, please contact us.

  

Consumer Lending and Services, Fair Lending, Legal Developments, State Regulatory

Texas OCCC issues advisory bulletin regarding amended MLA rule

Starting today, October 3, 2016, pawnshops nationwide will be obligated to follow the recently updated Military Lending Act (MLA) rule. In response to the release of the amended MLA and updated exam procedures by the Consumer Financial Protection Bureau, the Texas Office of Consumer Credit Commissioner (OCCC) issued an advisory bulletin summarizing the MLA’s requirements for Texas pawnbrokers. The guidance contains 20 questions and answers regarding the new regulations on loans involving military personnel.

Two noteworthy points for Texas pawnbrokers are addressed in the bulletin. First, Texas pawnshops are now required to have a written policy detailing how a person’s covered borrower status is determined. Additionally, an existing pawn loan that is extended in accordance with Texas law by having the borrower sign a memorandum of extension will not be considered to be a new loan or renewal that triggers the disclosure requirements of the MLA. However, the OCCC may modify its guidance if the Department of Defense decides otherwise.

Pawnbrokers make up a segment of the financial services industry that will be affected by these new rules under the Military Lending Act. Attorney, Jackie Mallett recently hosted a webinar discussing the amended rules and how they will affect the pawn industry. View the webinar in its entirety here

Consumer Lending and Services, Fair Lending, Federal Regulatory, Non-Depository Institutions

Amended Military Lending Act goes into effect on October 3; CFPB releases updated exam procedures

Today, September 30, 2016, the Consumer Financial Protection Bureau (CFPB) identified the updated exam procedures it will use to audit lenders who do business with military personnel. According to CFPB Director Richard Cordray, “[t]he updated exam procedures…will help ensure that servicemembers and their families are dealt with in a fair and safe manner when attempting to access credit.” Specifically, the requirements prohibit interest rates above 36 percent MAPR, mandatory waivers of consumer protection laws and mandatory allotments.

In its press release, the CFPB vows to strictly monitor financial institutions, their compliance programs and their “overall efforts to follow the rule’s requirements.” Evaluating everything from staff training to loan implementation, the CFPB will use the new rules to prevent substantial consumer harm. The updated Military Lending Act rules go into effect on October 3 for creditors. Credit card companies must be prepared to comply with the new rules by October 3, 2017.

Pawnbrokers make up a segment of the financial services industry that will be affected by these new rules under the Military Lending Act. Attorney, Jackie Mallett recently hosted a webinar discussing the amended rules and how they will affect the pawn industry. View the webinar in its entirety here

Compliance Management, Consumer Lending and Services, Depository Institutions, Fair Lending, Federal Regulatory, Non-Depository Institutions

Proposed Ohio bill could impact nonbank lenders and credit services organizations

The Ohio General Assembly is considering a major overhaul of Ohio’s banking laws, and hidden within the 443-page legislation are two changes that will likely impact nonbank lenders, lead generators and credit services organizations. Senate Bill 317 was introduced on April 20, 2016, and proposes to do the following:

  1. In the current version of the bill, Section 1103.18 of the Ohio Revised Code would be amended to allow a state-chartered bank to sue and obtain a temporary restraining order, an injunction and damages, including punitive damages, from any person who uses a state bank’s name in an advertisement in a manner that misleads a person into believing that the person issuing the advertisement is associated or affiliated with the state bank.

Thus, mailers showing a consumer’s current bank lender on the envelope, in the envelope window or anywhere in the advertisement could subject the nonbank lender to civil litigation and punitive damages.

  1. The bill also proposes to grant the deputy superintendent for consumer finance authority to examine credit services organizations licensed under Chapter 4712 of the Ohio Revised Code. The amendment, however, is not being made to Chapter 4712. Instead, the amendment has been placed in Ohio Revised Code Section 1181.21(C).

Track the progress of the bill here.

Consumer Lending and Services, Legal Developments, State Regulatory

Email spoofs: Criminals posing as your government examiner

Imagine the humiliation of having to confess that your company had a data breach and inadvertently sent hundreds of loan files chock full of nonpublic personal information directly to a criminal posing as your friendly government examiner. That would not be a good day at the office.

How could this happen and what steps can you take to prevent this nightmare? Here are dos and don’ts to help you verify the identity and credentials of examiners conducting remote examinations. Read more >>

Compliance Management

Ohio prepayment penalty adjustment for 2016

Don’t forget to update your Ohio Homebuyers’ Protection Act Informational Document with the 2016 prepayment penalty adjustment. Beginning January 1, 2016, no mortgage broker, loan officer or nonbank mortgage lender may charge a penalty for the prepayment or refinancing of a residential mortgage obligation secured by a first lien if the loan amount is less than $87,410. See Ohio Revised Code 1343.011(C)(2).

The Ohio Homebuyers’ Protection Act Informational Document is required by Ohio Revised Code 1345.05(G). An acknowledgement of the consumer’s receipt must be retained by the lender, mortgage broker and loan officer, as applicable. The Ohio Attorney General and the Department of Commerce may examine your records to ensure that you are providing the most current version of this document to consumers with the 2016 adjusted amount. The updated form can be found here. The rule regarding distribution and receipt of the Informational Document can be found here.

We hope you have a happy, healthy and prosperous New Year.

Ohio Division of Financial Institutions, State Regulatory